Alibaba Reports Slower Growth as U.S.-China Trade War Intensifies

One of the world’s leading internet giants appears to be
feeling the effects of China’s economic slowdown and the
.

The Alibaba Group, China’s largest e-commerce company, said
on Wednesday that revenue increased by 51 percent in the
March quarter from the same period last year. That topped
Wall Street’s expectations, and represents a pickup from the
quarter before. But it is still the company’s second-slowest
pace of revenue expansion since early 2016.

For the full year that ended March 31, revenue also grew by
more than half. The company said, however, that the increase
was partly the result of adding several recently acquired
businesses, such as the takeout delivery service Ele.me, to
its sales computations. Without those, it said, full-year
sales would only have increased by 39 percent, the slowest
growth in three years.

Alibaba also said the number of customers on its Chinese
retail marketplaces for the full year that ended in March
grew to 654 million, an increase of 102 million.

since the tariff
fight with the United States began last year. Diplomacy with
Washington . Alibaba’s sprawling business makes
it a closely watched bellwether for consumer and business
sentiment in China. But the company’s size and breadth may
also make it better positioned than many other Chinese
businesses to weather the present choppiness.

With services from commerce and food delivery to payments and
travel booking now under its umbrella, Alibaba has built such
a vast ecosystem of interconnected products and platforms
that its hold on Chinese consumers and merchants is almost
unassailable, said David Dai, an analyst at Sanford C.
Bernstein in Hong Kong.

Alibaba is “over all in a much stronger position as compared
to any other internet or e-commerce company in China,” Mr.
Dai said.

Yet in this season of high anxiety about the trade war and
the global economy, China’s entire tech sector is feeling the
pressure.

Leading companies have . Start-ups, including some that
Alibaba has invested in, . Coders are and unpaid overtime — a
sign, industry observers say, that the years of breakneck
growth and boundless optimism for Chinese tech companies are
past.

that it will not lay off any employees this year. But the
company has not been immune to strain. , it said it would hold off on
charging merchants more to advertise on its shopping sites,
despite the hit to revenue growth that would cause.

Such ads, along with other services that help merchants reach
customers, represent the biggest part of Alibaba’s sales, and
nearly all of its profit. Unlike Amazon, Alibaba does not
pocket proceeds from merchandise sales on its platforms. It
makes money by charging third-party sellers to use its
digital shelves and signboards.

Alibaba has said it will avoid ramping up ad sales until it
has collected more data about whether new personalized ads in
its shopping app are successfully convincing customers to
hand over more of their money.

But Alibaba executives have also said the company does not
want to add to its merchants’ expenses at a time when many of
them are already jittery about the economy.

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